The famous investor Warren Buffett once said, “Be greedy when others are afraid.” And with the market cryptocurrencies down about 40% to $1.3 trillion year-to-date, this could be a good time for investors to look for quality assets that are trading at a discount. Let’s see why Avalanche (AVAX -2.25%) and The Sandbox (SAND -0.35%) should be on your radar.
Avalanche is a blockchain designed to host decentralized applications (dApps), self-executing programs that provide services on the network. Also read: This cryptocurrency that even crypto skeptics are picking up† It faced short-term headwinds due to its association with the failed stablecoin platform Terra. But that challenge doesn’t destroy his long-term growth thesis.
In early May, the cryptocurrency TerraUSD, which tracks the price of the US dollar, lost its peg, causing its companion token, LUNA, which was designed to absorb the volatility of the stablecoin, to collapse. Avalanche also suffered because the Terra developer, through the Luna Foundation Guard (LFG) (an organization that owned digital assets to support Terra parity), holds approximately 2 million AVAX tokens – fueling fears that he is holding this position. could lose to pay real costs such as taxes or possible lawsuits.
But with nearly 270 million AVAXs outstanding, the sale of LFG’s holdings is unlikely to have a significant impact on Avalanche, aside from bad press. And investors need to maintain a long-term perspective.
Unlike most blockchains, Avalanche is naturally deflationary. The platform has a fixed maximum supply of 720 million AVAX tokens and burns (takes them out of circulation) all its transaction fees. To date, it has burned approximately 1.8 million AVAX units worth $55 million. This mechanism should help to increase the price of the token in the long run – although this depends on whether demand increases or remains stable, which is not guaranteed.
Is the metaverse an overrated vaporware or a unique investment opportunity? Time will tell. But no matter how the concept evolves, blockchain technology is already playing a role in its development. Also see: UAE Announces New Law to Regulate Cryptocurrencies and NFTs† Investing in The Sandbox is a great way to capitalize on this trend because of the industry’s first mover advantage.
Some major financial institutions are optimistic about the metaverse. CitiBank analysts estimate the opportunity could be worth as much as $13 trillion by 2030, making it the “next generation” of the Internet. Cryptocurrencies such as The Sandbox are well positioned to capitalize on this trend through technologies such as non-fungible tokens (NFTs), which are a secure way to establish ownership of digital assets.
The Sandbox has a portfolio of more than 166,000 digital real estate plots called LANDS, where individual users can build games and other digital experiences. And because it is one of the first cryptocurrency projects to show tangible progress in building a blockchain-based metaverse, it has garnered significant interest in the real world.
In May, the Dubai Virtual Assets Regulatory Authority announced plans to open a seat within The Sandbox to engage with cryptocurrency-related companies seeking to operate in the jurisdiction. This is a huge vote of confidence in the platform that could attract more investment.
Investing in a bear market is tricky because it is difficult to identify the bottom of the wave. Also see: eBay plans to support cryptocurrencies for payments† But time in market is usually more important than market timing. And while investors may want to wait a few months for the dust to settle, Avalanche and The Sandbox can be excellent long-term bets due to their unique designs and growing market opportunities.
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